If you are a homeowner and thinking of taking financial assistance of some kind, then there are some things that you need to think about before taking out a loan. First and foremost, decide on the amount that you require and the loan type that you want to go in for.

Secondly, think- do you really want this loan? Can you afford the loan? Do not take more than what you can afford just because you are being offered a big loan amount. And this is even truer if you are going in for secured credit.

Secured loans are asset based loans so, in the event of failure of repayment, there is a possibility that you may lose your home. Although, this type of credit does come with a lot of flexibility and advantages, it does put your home at risk.

Some of the benefits of secured loans include repayment holidays, fixed, capped or variable interest plans, upto 125 per cent LTV, upto 25 years of repayment policy, refundable PPI (Payment Protection Insurance) and accelerated repayments without penalties.

However, notwithstanding all of these, a loan against collateral is still a dicey proposition. Homeowners are the preferred clients as far as lenders are concerned. This is certainly no surprise. Secured homeowner loans are no risk loans for lenders as they are evaluated against an asset and there is absolute surety of getting the money back in full.

Secured homeowner loans can provide the potential borrower up to £250,000, subject to the available equity. But, just because you are eligible to get such a big amount, it doesn’t mean that you take it on. Lenders may try to push you to take on a bigger amount than you might actually require, but, don’t give in. Remember the more money you borrow, the more interest you will have to pay.

The warnings flashing on all the flyers and the bottom of web sites advising the dangers of taking out unsolicited loans is not to be ignored, especially in the case of secured loans.


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